Buying a railway ticket at a counter might become costlier. To encourage online ticket sale, the Indian Railways is examining a proposal to levy a ‘special fee’ on the physical sale of tickets.
Going against the traditional model followed by e-commerce giants, such as Flipkart and Myntra, as well as various airlines that offer discounts online, the railways has chosen a different path. The national transporter will increase the prices at ticket counters to offer ‘cheaper’ prices online.
Senior railway officials, however, did not comment on the quantum of difference between online and offline prices or what would be the gains for the railways. However, officials agreed that promoting online ticketing will be the way forward to bring in efficiency and cut costs.
“We are working on various innovative methods to incentivise the consumer to buy online. Apart from time flexibility and convenience, we are exploring options to offer consumer better prices to encourage online ticketing,” said D P Pande, member (traffic), Railway Board.
Other proposals the railways is currently considering are offering sale of tickets for special holiday/festive trains run on Holi or Diwali exclusively through online. Recently, the railways had launched premium trains, whose tickets were exclusively sold online. The reasons for choosing a different path are obvious. With the railways having one of the lowest passenger fares in the world, officials argue that there is no scope to cut fares to promote online ticketing.
Considering the politically-sensitive nature of any passenger fare increase through budgetary announcement, the railways has for the past one year chosen to alter fares outside the Budget. Through the fuel adjustment component, passenger fares were raised up to 3.5 per cent in 2013.
Former railway minister Pawan Kumar Bansal had set the trend by raising passenger fares up to 25 per cent in January 2013 outside the Budget.
Recently, Indian Railway Catering and Tourism Corporation (IRCTC) reported 580,000 ticket-booking in a single day – the highest number so far. IRCTC, which books about 50 per cent of the reserved category tickets online, contributed Rs 14,800 crore in railway revenue for calendar year 2013.
Railways’ total passenger earnings for 2013-14 would be around Rs 40,000 crore.
In the coming days, railway ticketing would not be the only category to be bigger online than at the counters. According to a recent Nielsen survey, Flipkart is the largest single retailer of books, beating the likes of Crossword and other physical stores. Experts suggest that the next to follow suit are categories such as electronics, movie tickets and garments and accessories.
In 2007, the IRCTC web portal was selling just about 32,000 e-tickets a day. Last year’s figure was 385,000 tickets a day, which has grown to 463,000 tickets a day – an annual growth of 20 per cent.
While the volume of tickets booked has been persistently growing for IRCTC, the share of online ticketing in the total income of IRCTC dropped from 30 per cent in 2011-12 to 23 per cent in 2012-13. Reason: IRCTC’s catering business has yielded better returns.
Although IRCTC charges a convenience fee of up to Rs 20, the fee is among the lowest in the travel segment with online air booking attracting Rs 100. Other ticket booking portals such as bookmyshow.com charge about Rs 50 for a movie booking.